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Digm Piece (Op-Ed)

How Starting a Family Ruined My Finances

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Wait… Wait… I know what you’re thinking. How can this guy be writing an article about something as precious as his family, but sound so insensitive in the title? What does he mean that starting a family ruined his finances? Surely there has to be a positive angle when talking about family finances.

Let Me Explain

First and foremost, starting a family is one of the best things that has ever happened to me in my life and anyone who has experienced being a parent will tell you how much joy parenting really is—up to a certain point. The truth of the matter is that children are blessings and can change your life for the better, but unfortunately they can also change your wallet in the opposite direction if you aren’t properly prepared.

Love Is in the Air

My wife and I met over 15 years ago and it was love at first sight. Well, maybe not exactly—I had to convince and woo her a little, but she eventually made the right choice and fell to my charm (or my unwavering persistence). We had a great time dating and rarely discussed starting a family because we were enjoying our lives, careers, and looked forward to more world traveling. After five years of dating, we decided to get married and wasted no time starting a family thereafter. My daughter was born approximately 11 months after our nuptials and this was one of the best days of our lives. We enjoyed our new family immensely, but soon after we were hit with the reality of parenting and raising a young child.

Love Didn’t Pay the Bills

Bills started to pile up immediately and we were left with many tough decisions to make as it related to our priorities. Were we going to pay our medical bills first or use our cash to buy clothing and diapers? Could we afford child care or should one of us stay home? Was it time to pick up a second job or was there another way to bring in more income? The fact that it is expensive to start a family set in pretty quickly.

Love Lowered Our Credit Scores

After months of robbing Peter to pay Paul, we were almost maxed out on our credit cards in an attempt to make ends meet. We watched our credit scores closely and noticed that these high credit card balances had taken a toll on our score, dropping it almost 30 points in a short amount of time. We learned that overuse of our credit cards had taken us way over the recommended maximum utilization ratio of 30 percent.

Love (and a Little Discipline) Fixed It All

Immediately, we started to budget our expenses and focus on our needs rather than our wants. We tightened our belts a little and by doing so we were able to pay down our debt and get our score back on track. We also started to pay ourselves first and created an emergency fund with a high-yield savings account in order to prevent ourselves from being dependent on credit. We focused on our needs and budgeted for the wants, and before we knew it, our ruined finances became a walk in the park of family finances.

The Lovely Conclusion

Starting a family is still our greatest accomplishment, but turning our family finances around is a close second. Never underestimate the power of planning, but also don’t beat yourself up if life throws you lemons—or babies for that matter. Now at child number two, my family finances are growing and what seemed as an out of control situation was put back in order with a little planning and discipline.

Do you have any financial comeback stories? I would love to hear them below.

 

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is the Head of Financial Education at BankMobile and Editor-in-Chief at Paradigm Money. The views and opinions expressed are those of Ash Cash and not the views of BankMobile and/or its affiliates.

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Digm Piece (Op-Ed)

Top Ten Freshman Money Myths

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Starting college is one of the most important and exciting times of your life. Now that you’re all “checked-in,” enjoy your college experience without worrying about where your next meal will come from by chasing away these common freshman money myths. (more…)

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Digm Piece (Op-Ed)

Do What You Love for Free – Here’s Why

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This is ParadigmMoney.Com, right? So, speaking about a paradigm shift should come as no surprise. In science and philosophy, a paradigm is a distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field. When speaking about money, most believe it is something you work for and not something that works for you. In all truth, the one percenters understand this concept quite well. In order, to wake up and do what you love, you too must shift your thoughts when it comes to finances.

Doing what you love for free allows you to create freely. You can come up with disruptive, out of this world, never seen before creations that will rock this planet. Take Elon Musk from South Africa, founder of X.com which went on to become PayPal and sold to eBay for 1.5 billion dollars. Musk is also the CEO of SpaceX which designs, manufactures and launches advanced rockets and spacecraft. The company was founded to revolutionize space technology, with the ultimate goal of enabling people to live on other planets. You may say, of course, he can do this, he is a billionaire and co-founder of Tesla.

Not true. PayPal, Tesla, and SpaceX are all products of Musk doing what he loved. As a child, he was an avid reader and taught himself computer programming leading to the creation of X.com. He dropped out of college to start a company with his brother and here’s what he had to say about that PayPal deal… “My proceeds from the PayPal acquisition were $180 million. I put $100 million in SpaceX, $70m in Tesla, and $10m in Solar City. I had to borrow money for rent.” Elon Musk’s current net worth is estimated to be at about $13.3 billion. No bad at all.

The reality of the matter is the less you are attached to money the more money flows to you. Pay more attention to creating things that move the culture forward. Starting at doing what you love with ultimately position you for financial success and happiness.

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Digm Piece (Op-Ed)

How Much Does College Cost?

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How much does college cost these days? If you’re preparing to go to college and will need to find a way to finance your own education, this is one of the first steps to figure out.  Then you’ll want to find out all of your options and create a plan. Here’s a quick breakdown on the typical cost of college. (more…)

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